Report Says Self Driving Cars Could Slash Insurance Premiums

Posted on May 30, 2012

A new report concerning autonomous cars paints a pretty picture for those hoping that such technology could have an impact on their wallet.

The report, which was released by the Celent consulting firm, is called “A Scenario:  The End of Auto Insurance:  What Happens When There Are Almost No Accidents.”  Although there are a lot of “what if’s” involved in their analysis (it is just a scenario after all), the report estimates that automobile insurance rates could drop by around 80%.

First, the scenario relies on early estimates that place a drop in automobile accidents at 90% from their current rate.  This might even be higher than what they actually could be.  In fact, American Scientist believes that death rates akin to commercial flight or railroad accidents would be the ultimate goal, putting deaths somewhere around 1% of their current levels.

In addition to the 90% drop, the scenario leans on the continued growth and implementation of certain technologies.  The first is telemetrics, which would allow auto insurers to better determine pricing.  Then comes collision avoidance systems, automated traffic enforcement that eliminates a need to be pulled over, and autonomous vehicles themselves.

If these tools continue to grow, Celest estimates insurance premiums will be 60 to 80% less expensive than they are now.  The shift would be gradual at first, and then drop exponentially as certain technologies become increasingly commonplace in 2018.

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